Flutter expects UK share gains as 40% gaming tax bites, but Richard Clarke says the black market is the real risk

Flutter-owned Paddy Power and Betfair expect to benefit as the UK’s remote gaming tax rises from 21% to 40% on 1 April, but managing director Richard Clarke said market-share gains are not the point if unregulated gambling grows faster. For PSPs and acquirers, the message is simple: higher tax pressure can reshuffle regulated volume, but it can also push activity into channels that do not settle cleanly through the regulated stack.

1. Speaking at the SBC Summit in Lisbon last Wednesday, H2 Capital’s Josh Hodgson framed the discussion around the UK’s remote gaming tax increase from 21% to 40%. He said tier one operators already hold around two-thirds of the UK market, and that share could rise to as much as 80% as smaller rivals absorb the squeeze.
2. Richard Clarke, managing director at Flutter-owned brands Paddy Power and Betfair, said Flutter expects a “£500 million impact from next year.” He added that the impact has already started to come through this year and “it has to be managed,” although he did not disclose what Flutter’s response will be.
3. Clarke said Flutter could take market share because it is a big business with resources that smaller operators do not have. “We’re a big business, and there are things we can do with one or two million that give us an advantage,” he said, arguing that some compliance and tax costs do not scale well for smaller firms.
4. He was explicit that market-share gains are not a reason to celebrate if the irregular market grows faster than the regulated one: “If we end up in a situation where Flutter grows market share while the black market grows faster than the regulated industry, that can’t be something anyone should be happy about.”
5. The tax pressure is already producing structural changes across the sector. Entain Plc has announced plans to lay off approximately 400 customer care positions across 11 countries, including the UK, Gibraltar, Ireland, and mainland Europe, equal to about 20% of its customer support workforce. That follows an earlier round in which Entain cut 500 corporate, product, and technology roles.

Flutter is not the only operator being squeezed. Clarke said the UK’s regulatory and tax burden falls more heavily on smaller businesses because “some of those costs don’t scale,” which is exactly the kind of pressure that tends to decide which merchants keep premium payments access and which ones start looking expensive to bank.